Truths and our entities

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Advertising industry in Brazil reached 200 years with the help of institutions that designed its structure and, although with different profiles, they now need to understand that they are all in the same collaboration boat.

If there were no entities in the marketing and communications industry, the marketing and communications industry would not exist. As an industry. It would be a bunch of erratic companies, sleepwalking random businesses. It wouldn’t roll.

They were, are and will always be the entities that gave, give and will give structural architecture to this industry and to all of us who, like moths around the light, gravitate around it.

And we are many millions, inside and outside the sector. In fact, it’s the whole society, because this industry is everywhere in people’s lives.

As Mario D’Andréa, President of ABAP, told me for this text: “Few activities are capable of multiplying wealth for the country and jobs for people like Brazilian advertising”.

In fact, no other, my dear Mario.

A CENP study carried out in 2021, still under the management of Caio Barsotti, revealed that for every real invested in publicity, another R$ 8.54 are generated in GDP. What industry does this? (Link to the study at the end, thanks Regina Augusto for the source.)

Similar results would have been obtained in similar surveys if carried out in any country with an open economy.

A bit of history, for those who imagine that the present was born today

Before entering the biggest DR among entities that has occurred in our market, this most recent diaspora that we have all seen happen, I will here invite you to understand how and why we are the result of processes, of how our ideas were not originally created by us and that our reality current is not the daughter of a brooder.

I had the honor of being the co-author of a book that everyone in the industry should read, not because I co-wrote it, but because it ended up constituting over time, in fact, one of the most relevant documents in our history, and one that became called “200 Years of Advertising in Brazil”. Read it again and see well… 200 years. Many schools still adopt it because it remains unique on their records.

My co-author had already passed away when I co-wrote part of the book with him. It was Ricardo Ramos (yes, son of Graciliano Ramos), a brilliant journalist, chronicler, writer of 12 books, editor and creative director of several agencies in the market, Director of ABAP and professor of advertising at ESPM and Cásper Líbero. Ricardo, who I had the opportunity to meet while still alive, at the invitation of Meio & Mensagem, had written a book that recorded the history of our activity from 1800 to the 1970s.

On the 25th anniversary of Grupo M&M, as editor there, Salles Neto and Sérgio Borgneth invited me to write a second part, an update, which ended up covering the years 1970 to 1995. missing pieces, although the unmissable documentary by João Daniel, “30 seconds”, which we can watch on HBO Max, already makes his excellent contribution to this missing piece).

That is, in the best style of advertising promotions, whoever read the book, took one, but took two.

Well then. On page 62, Ricardo wrote the following, reporting the facts he highlighted from the 1960s: “Foundation of the Brazilian Association of Advertisers (ABA). At first, it worked little. But then it clicked. Lately, since it has been dealing with the new system of remuneration for agencies, it has become a kind of united front of what will perhaps be the (future) platform for clients: demand for more diversified services on the part of agencies. These new areas of interest are mainly research, program controls, competition surveys and the evaluation of advertising results”.

Agenda little different, in essence, from today’s ABA.

Clarifying further this “new agency compensation system” to which he refers, on page 63, Ricardo sends there: “The change in the agency compensation system governs now that the former 17.65%, inspired by the standard style in the USA, became 20%. It was not a smooth passage, but one made with blood, sweat and tears.”

Discussions about compensation rates (and their shifting criteria)  were already the subject of debates at that time. Already hot, as highlighted by Ricardo. And essentially in little different from those of today.

Let’s skip to page 146, in a leap of 20 years, for an excerpt now written by me: “No businessman in the advertising sector would admit to any journalist, but the fact is that, in 1991, free negotiation between advertisers and their agencies was the great commercial truth of the market. Defending as best they could (as they still do today) the validity of Law 4680, which establishes 20% and 15% as the fixed rates of agency remuneration, the leaders covered the sun with a sieve. Nobody else – or very few – adopted this criterion as a practice. It was much more a threshold, from which new rates were negotiated. All down, of course. Law 4680 remains in effect. But it’s just a joke.”

I wrote this in 1995.

Leapfrog for the Present: Inequality at the Bottom of the Chain

Something we are tired of knowing, but often seem to ignore, is that, structurally, our industry’s value chain is made up of links with unequal economic power. And that will never change. It’s in our genome. The crime of disregarding this premise is being naive. Some might call it stupid, but I would never say that.

Over the years, notably in the last 20, our entities have shriveled up. They created for themselves old statutory, regulatory and codifying truths that are hollow in reality and far from the evolutionary complexity of the market, business and the recurrently disruptive contemporary society.

In addition, they created proprietary agendas, as if our industry were an archipelago of loose islands in any ocean and not a continent.

For there is only one ultimate truth: there are no islands. It’s all one chain. All these entities will have to understand each other as links in a single unambiguous chain, which grows stronger the more it intertwines. And it breaks completely, if a link, just one, separates or breaks.

I didn’t make it clear enough, but I’ll correct my mistake here and now: the most relevant historical fact of a 200-year history of advertising in the country is Self-Regulation.

Self-regulated sectors are more consistent, resilient, efficient and sustainable over time. For all links in the chain.

And lead comes around.

Its guardian is the CENP, but not. They are also all entities and all players in the industry. Each one of us.

Synergies in progress

CENP is experiencing a new phase under the presidency of Luiz Lara and the new executive board occupied by Regina Augusto.

Luiz told me the following for this article: “Cenp’s transformation is a reflection of the market. We are in a moment of renewal and expansion of our purpose and our own performance. As representatives of the entire advertising ecosystem, we literally want to be a forum for discussions, and above all, move away from the supervisory and reactive profile, which marked the entity’s previous activities, towards a more purposeful profile that emulates good practices. Our new premises mirror this mission”.

The first step of this new perspective of the entity takes shape in the 5 premises recently launched by CENP, which speak of hybrid and dynamic business models, transparency and ethics, incentive practices that maximize the return on investment, observance of the multiplicity of players and, for end, and most importantly, the sustainability of ecosystem relationships.

On the other hand, using a similar compass and pointing towards a common north, the ABA’s Guide to Good Practices of the Brazilian Advertising Market, made with the contribution of 80 market leaders, defends the non-mandatory use of fixed discount tables and free negotiation between the links, but does not fail to recognize that the agencies have a relevant source of revenue in it and that this needs to be preserved.

This “new” ABA, if we can call it that, presided over by Nelcina Tropardi (without ever forgetting here the recognition of the historic work of Sandra Martinelli as Executive President of the entity) has its purpose very clear: “The ABA exercises its vocation for collaborative protagonism and its mission to disseminate and stimulate inspiring initiatives and good practices to support marketing market leaders advancing towards the achievement of a more ethical, responsible, fair, robust and thriving ecosystem. For this, we believe in joint construction as a way to have the best solutions and we are open to dialogue with other entities and the market.”

So everyone in the same collaboration boat.

For his part, Mário, on behalf of ABAP, reminds me: “An activity as powerful and fundamental as ours always needs high-level institutional dialogues, in an attempt to maintain economic balance and, above all, find new ways to maintain its social importance. These dialogues are only possible through strong and respected entities”.

An indisputable and non-negotiable point.

Last but not least, we have an IAB also reinvigorated by Melissa Vogel’s new management, which with the always competent contribution and direction of Cris Camargo as Executive President of the entity, commented the following for this text: “At a time when the desire for good practices and social responsibility is latent, it is very good to observe the search for development of each of the associations that together make up the advertising market and play a fundamental role in supporting its growth. IAB Brasil, since its creation, leads the main discussions on digital advertising in the country, and works for its sustainable development. We present standards and best practices for planning, educating, creating, buying, selling and measuring online advertising with a complete view of this ecosystem. By consistently fostering digital, we support different sectors of the economy.”

All these movements and postulates of the most important national entities of our industry deserve here not only all our enthusiasm, but also our full support.

Complexity and Diversity

The entities cited so far do not exhaust the industry as a whole. The growing complexity of the chain contemplates thousands of companies, which will become more and more thousands, offering recurring innovations for marketing and communication solutions, in an increasingly digital world.

This complexity, the entities have not yet been able to properly embed.

I also highlight that for the first time in our history, we have women in the leadership and direction of these entities. A more than welcome piece of diversity.

But it remains to open doors, windows, hearts, minds and chairs for the new oxygen of piercings and tattoos. An inclusive LGBTQIA+ agenda is lacking. It remains, as I am tired of registering here, to let reality and society participate in this game in fact and by law. As they are, without fake versions, in their entirety.

Well, I think we can all agree that no more blood, sweat and tears. How about reaping the more than obvious fruits of a cohesive and strong industry, with even stronger entities, in which everyone only wins?

It makes sense?

OBS.: I want to publicly highlight the relevance of Caio Barsotti’s work at the head of CENP, as its executive president for 13 years. His contribution was definitive throughout this period, when, many times, our industry swung back and forth, and CENP’s institutional posture worked as an invaluable pendulum of support. Looking at it this way and from this perspective, we will fairly and adequately value its management. Thank you, Gaius!

Text by Pyr Marcondes, Senior Partner at Pipeline Capital.

Article originally published by Meio&Mensagem.

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